Life Time Fitness Raises $45 Million

EDEN PRAIRIE, Minn. - In its third round of private equity financing, Life Time Fitness raised $45 million. New York-based Patricof & Co. Ventures - a global equity investment firm that has invested in businesses such as Office Depot and America Online - led the financing. Norwest Equity Partners, the lead investor in Life Time's first two rounds of financing, also participated.

Life Time specializes in multipurpose, suburban clubs that cater to families. The typical Life Time facility occupies 100,000 square feet and costs $15 million to $20 million to build, according to Shaun Nugent, Life Time's executive vice president and chief financial officer.

Currently, Life Time Fitness locations can be found in Minneapolis/St. Paul, Detroit, Columbus, Indianapolis and Washington, D.C. However, the club chain wants to expand nationally. The new round of financing will help make this expansion happen.

Although not a household name (not yet, anyway), Life Time has enjoyed great success attracting members in new markets, Nugent claimed. For example, Life Time entered the Detroit area in January of 1999 with a facility in Troy, Mich., and within a year, the facility had reached its membership cap (approximately 10,500).

Open 24 hours a day, Life Time clubs offer memberships for $40 to $50 a month, depending on location. For that fee, members get access to the entire club - and they don't even need to make an annual commitment. "We don't have contracts," Nugent explained. "We have month-to-month relationships. So every month, we have to please [members]. We have relatively low turnover compared to the industry turnover."

Having solidified its position in the Central/Northeast United States, Life Time has identified 30 markets - such as Phoenix, Boston and Dallas - for its expansion efforts. In fact, Life Time plans to enter Chicago in a big way. There are already five Life Time units under construction in the Chicago area (the first will open this month), with other pieces of land under consideration.

While building new clubs takes time, Life Time prefers greenfield growth to acquisitions. With an acquisition strategy, it's hard to keep a homogeneous brand, according to Nugent. "Greenfield growth allows us to control who we are," he said.

Fortunately, the capital that Life Time just raised will carry the company's greenfield growth into the foreseeable future. However, to become a true national brand, Life Time will need even more capital. Eventually. Don't be surprised if Life Time announces an IPO somewhere down the road.

"At some point, you need public equity to fuel growth," Nugent said.

A study published in Circulation: Journal of the Ameri-can Heart Association noted that the blood vessels of active older adults work just as well as athletes half their age. The study focused on endothelium, a protective layer of cells that, in healthy blood vessels, produces nitric oxide. This latter substance, in turn, dilates the vessels and prevents blockages. Aging can affect endothelium, leading to health problems.

Conducted at the University of Pisa in Italy, the study compared 24 sedentary subjects (12 younger, 12 older) to 25 athletes (11 younger, 14 older). The young subjects averaged 27 years of age, while the older participants averaged 65.

Researchers gave partipants acetylcholine, a substance that causes dilation in blood vessels when endothelium produces nitric oxide properly. The study's researchers found that the younger subjects, both athletes and sedentary, showed similar dilation. However, the older athletes experienced better dilation than their sedentary counterparts. In fact, the blood vessels for the older active adults behaved like the blood vessels in the younger study subjects.

While the older partipants in this study were athletes, the researchers pointed out that you don't need to be an athlete to improve blood vessels. "Aerobic exercise five days a week - rather than intensive training - might just do the trick," said Dr. Stefano Taddei, an associate professor at the University of Pisa.

Exercise, not calcium intake, may be the key to stronger bones in women, according to a study in Pediatrics, the medical journal of the American Academy of Pediatrics. Focusing on the hip bone (frequently the site of fractures in women with osteoporosis), the six-year study followed 81 girls who were approximately 12 years old at the study's beginning. The researchers tracked calcium supplementation and fitness/sports activity.

At the study's conclusion, the researchers found that daily calcium intake above 900 milligrams (equal to roughly two glasses of milk) didn't have a lasting impact on bone mass in the hip. However, they did note a link between exercise and bone mass.

The study indicates that female teens who engage in weight-bearing exercise daily are less likely to develop osteoporosis and fractures later in life. The average woman gains 40 to 50 percent of her skeletal mass during adolescence.